Report: 17 million people stopped buying CDs in 2008

Not only are CD sales still falling, but a whopping 17 million customers …

While overall music sales were up 10 percent in 2008, the year saw a drop not only in CD sales, but in the number of customers actually purchasing music. But according to a new report, the act of music listening is actually on the rise. While digital music purchases remain strong, the numbers show that there is still much more work to be done in the industry's transition to a new, more diverse set of business models.

Sympathy for the devil?

NPD's annual Digital Music Study found that there were 17 million fewer CD customers in 2008 than in past years. CD sales have been dropping for quite some time, and while 1.5 billion songs were sold digitally last year, the number of Internet users paying for digital music only increased by 8 million in 2008.

NPD saw all demographics pulling back on CD purchases, but the most significant groups were teenagers and those over 50.

The primary reason for cutting down on CD purchases was a simple slashing of entertainment budgets across all demographics. Cheaper prices for digital albums also affected consumers' thinking about physical CD prices (which suddenly seem more expensive), but the pick-and-chose nature of buying individual songs and instant delivery also provided a boost for digital downloads.

Gaming also helped to steal attention away from music, as the industry experienced record billion-dollar growth in 2007 and 2008.

As CD sales continue their nosedive into oblivion and the worldwide recession takes hold, the companies that used to make physical media are feeling the effects. Last week, laid-off workers in a French Sony media plant effectively held boss Serge Foucher and head of Human Resources Roland Bentz hostage overnight by blocking the factory doors. The employees, who made tapes and other recordable media, were upset over the terms of their severance package (they would only get thousands of euros in relocation assistance and up to a year of severance pay, which was apparently offensive to their "dignity"). The executives were allowed to leave the building after agreeing to restart talks over the terms.

Not all news is grim

One trend that may finally be going mainstream is music streaming services. NPD's report notes that awareness and usage of Pandora doubled year-over-year to 18 percent of Internet users. Social network music streaming is also on the rise, as usage rose from 15 to 19 percent year-over-year. Nearly half of US teens are "engaging with music on social networks" now, so new revenue opportunities like premium account memberships and advertising are following.

Finally, NPD's report notes that "the music industry now has to redouble efforts to intercept and engage these listeners" in order to harness new revenue options like "upselling music, videos, concert tickets, and related merchandise." This is an idea that MySpace Music launched with last September, as the service offers merchandise like band t-shirts and Amazon goods when users purchase DRM-free MP3s.

The music industry is certainly experiencing a tough transition into the digital realm, but there's still money to made off of recorded music. The iTunes Store reached a digital music milestone in 2008 by passing Wal-Mart to become the number one music retailer in the US. There are now 36 million digital music customers, and digital music downloads now account for 33 percent of all music tracks purchased in the US.

Convincing customers to buy complete albums, though, now relies on overall album quality, not on forcing people to buy full CDs—and that means overall industry revenues may not recover to the levels seen during the CD boom years anytime soon.

Convincing customers to buy complete albums, though, now relies on overall album quality, not on forcing people to buy full CDs—and that means overall industry revenues may not recover to the levels seen during the CD boom years anytime soon.

That's ridiculous -- there's no reason that record companies can't force people to buy full albums regardless of the distribution method. Of course right now is a tumultuous and experimental period but if in a few years we are still seeing individual track purchases as the standard it will be because record companies have determined it is in fact more profitable (most likely increased sales of hit tracks outweighs the loss of sales of all the other tracks in an a la carte scheme).

When I was a teenager I pirated a lot of music, as I simply had no money to spend on music. Eventually I stopped doing even that, but I never really replaced it with a digital purchasing habit either. I've bought a few songs and albums DRM-free, but not much.

In general, I just find I have little interest in owning music.

Most music has such limited replay potential, that I don't really feel the need for a permanent copy. I also can't be bothered to piece together play lists to load onto a digital music device. I'd rather just listen to whatever the DJs serve up to me on the radio in the car, or listen to a streaming radio station online.

posted by: David BradburyI know that has nothing to do with the meat of the article... but Chris Cornell's new album is great.

Ok, let me start off by saying that I'm a pretty tolerant guy. I can read ridiculous comment threads all over the internet (not YouTube obviously-- nobody can/should read those) without losing my cool. But this...

I mean, what has happened to the level of discourse on this site when someone can troll so brazenly? What's happened to our humanity? You honestly expect us to believe that you enjoyed Scream? That's just beyond the pale. I'm not sure I can even... I just have to get out of here. Jesus.

People who say most music has limited replay potential aren't listening to the right music!

I purchased a lot of CDs in college, but I find it difficult to buy them any more. Tower Records has gone completely out of business. Most of the local music stores are gone. Even the music sections at other retailers are starting to be cut back.

The employees, who made tapes and other recordable media, were upset over the terms of their severance package (they would only get thousands of euros in relocation assistance and up to a year of severance pay, which was apparently offensive to their "dignity"). The executives were allowed to leave the building after agreeing to restart talks over the terms.

A fucking YEAR of severance??? AND relocation? WTF are they bitching about. There are millions out there right now with no severance package right now. That just rubs me the wrong way. They should take what they can get because they are damned lucky that Sony didn't just tell them "Were closing the factory, sorry you don't have a job anymore."

Most music has such limited replay potential, that I don't really feel the need for a permanent copy. I also can't be bothered to piece together play lists to load onto a digital music device. I'd rather just listen to whatever the DJs serve up to me on the radio in the car, or listen to a streaming radio station online.

There's definately a huge difference between music as a consumable and music as an entertainment service. Most people like to use both; some fall to either side. There's a lot of people who just listen to whatever is on the radio. Whatever happens to the recording industry, the various radio and music service content providers won't be going away anytime soon.

But if you genuinely enjoy music and think there's limited replay potential... you really need to seek out some new music! The fare served up by the commercial radio services is typically the *least* interesting music out there.

I still buy a lot of CDs, thanks mostly to Play.com. Most albums there are £5 with free shipping, and to have the complete album with all tracks in lossless form at that price is frankly a bargain; and besides, they look good on the shelf!

The music industry is certainly experiencing a tough transition into the digital realm, but there's still money to made off of recorded music.

I think that a bigger point is that they didn't have to. If record execs had pulled their heads out of the pile of blow for 2 seconds in the late 90's and realized what the potential for digital distribution actually was, they might not be in the situation they are in now.Would they have stopped piracy? Certainly not, but they might have been able to enter the market during it's largest growth period and offer a product that many fence sitters would feel more comfortable with. However, I am sure that the feedback from the industry will place the blame for this decline squarely on the shoulders of P2P.

Telecom marketplaces rarely provide a fully interactive environment where buyers can challenge sellers to provide their best price.

Moreover, buyers with small buying capacity can rarely benefit from discounted prices based on bulk orders, specially in the telecom minute business.

We know how difficult it is to find quality routes and trust-able carriers so that's why, Minutetraders provides a trading platform to leverage buyers abilites and bring suppliers into a common place to compete against each other.

I wonder how much the CD itself is disappearing? Looking at my stereo not much. What happens now is that I buy an album (still generally buy albums) online, then immediately burn it to CD as backup. I almost never listen to those CD's anymore but they are still there with the pile growing. I do think that indie music has been very good lately, say from about a year and a half ago or something.

A fucking YEAR of severance??? AND relocation? WTF are they bitching about. There are millions out there right now with no severance package right now. That just rubs me the wrong way. They should take what they can get because they are damned lucky that Sony didn't just tell them "Were closing the factory, sorry you don't have a job anymore."

Compared to Europe, most US workers are treated by their employers little better than Asian factory slaves. And we think we've got it good because we hop from employer to employer chasing a better paycheck.

I'm buying more CDs than ever before, because they're cheaper than digital downloads, and of course they are DRM-free and lossless. They even come with their own backup disc! Until the day I can stream every song ever recorded at a high-quality, I will stick with physical media.

I'll still buy CDs as long as they offer them. I'm not a big singles buyer. I like albums, as in a series of songs that are related and intentionally ordered in a certain fashion by the artist complete with accompanying artwork and liner notes. If I were a Britney Spears fan, I'd probably be buying digitally exclusively also but the artists I like tend to produce music that has goals beyond radio airplay. Also CDs sound better than MP3s and AC3 files and they don't get lost if the hard disk crashes. I'd rather pay a couple of extra dollars and have the media in my hands.

I mean, what has happened to the level of discourse on this site when someone can troll so brazenly? What's happened to our humanity? You honestly expect us to believe that you enjoyed Scream? That's just beyond the pale. I'm not sure I can even... I just have to get out of here. Jesus.

*chuckle* Seriously though, loving that album. Every track begs you to play the next track. I have listened to it on repeat for over a week now. First album in a _very_long_time_ that I have enjoyed from beginning to end.

Interesting.... I own close to 200 music CDs, but I just realized that yeah, it's been a good 5 years since I bought the last one in my collection!

I think there are several factors involved.

Most recently? My new car came with a factory radio that does XM satellite radio, and I'm finding that's pretty enjoyable. Sure, you can't hear specific songs when you want to, like you can with your own CDs, but they have enough format-specific stations so you can select the *type* of music you want to hear. My biggest gripe is with the sound quality. You can tell they use a lot of compression. It always sounds like MP3 music encoded in a relatively low bit-rate..... Decent, but not great.

More importantly though, I've just found it far more useful to have my music digitally encoded. I can collect all of it on a server at home, and share it to other computers on my LAN, or even stream it to my stereo in the basement. It's like having a CD changer that holds my WHOLE music collection, but is accessible by ALL my devices. Meanwhile, in the car or otherwise "on the go", I no longer have to deal with scratched or dirty CDs or skips when the player get bumped or jarred.

Sure, I could still just buy the physical CDs and rip them, using the original as a "master backup copy" ... but it hasn't been worth the price or hassle finding what I want. Not only are stores cutting back on the CDs they stock, but even if the price of one is only $2-3 higher than an online download from Amazon or something - it's cheaper to just buy the digital download and burn it to my own blank CDR as a backup.

I was one of those 17 million. I would personally love to be able to buy CD's again. But i can't bring myself to support the RIAA, i stand against everything they are. I don't want to put anymore money in their wallets.

Bought my last CD around Easter 2005. That was the first one in a few years at that time... My wife bought one just after Cristmas 2007. I think maybe she's bought 5 CDs since she got a Gen1 iPod suffle a bunch of years ago.

I've also dramatically dropped off on buying DVDs as well. Wife bought me 3 at christmas, and some family bought some for me as well. I've used a bestBuy gift card or two, or taken advantage of a "get a DVD free with purchase" option, but i don;t think I've spent my own cash on a DVD in 2.5-3 years.

I realized I have a large collection of movies i own that I've only watched once or twice each. Instead of spending $20-30 a month on disks, we just decided to get a netflix susbscription, and get HBO and Starz turned on. It cost is about the same, and with the help of a DVR and streaming Netflix, we basically get to see anything we want any time we want. Anything that slips through the cracks, good odds one of our friends has a copy to watch. We're considdering dropping HBO and Starz if we don;t get a good deal switching providers or getting a competitive matching offer (intro package runs out in a few months)

Music I buy online, mostly iTunes. I spend maybe $5 a month (on average, most months I buy nothing). We have no illegal music or video in our house. I ripped all the CDs before giving them to a family member. I've also streamripped about 10,000 more songs (which currently is perfectly legal). I export some stuff from the DVR to DVD when space is getting cramped, but I have a 1TB external drive on it now, so space is not yet an issue. (in fact, we managed to clean it out over Christmas, and I only have about 15 shows unwatched in it now).

I rarely buy CDs anymore because I rarely have a CD player around. All of my media is on my media center PC and is set up with a backup drive in case one of the hard drives finally dies.

I used to buy used CDs every week in high school/college when the used CD stores still existed but one day I realized I was never listening to the discs anymore now that they are ripped to a networked machine in the house. In the car I do NPR or the occasional mp3 CD I burn for a longer trip. When jogging or whatever I just plug my headphones into my Touch Pro and stream Pandora, last.fm, or one of the thousands of free Shoutcast stations out there.

The only time I buy CDs is when I go to a bar or a club, see a band I really like and want to support them. I usually buy their CDs since they tend to run around $5-10 and all the revenue goes to the band, not the RIAA.

It might be the economy but I don't think it should share all the blame. What about the fact that music from the big labels just sucks? When is the music industry going to step up and have the balls to say they just don't sign good musicians anymore?

If you are into any type of music in any genre the artists all sound the same and look the same. They push it out at an annoying rate. The only good artists are independents. Support them. Don't buy from the record companies. I refuse to buy and support the RIAA.

I am also with the other people who say why would I buy a CD of sucky songs when I can buy the one I like online for less.

A fucking YEAR of severance??? AND relocation? WTF are they bitching about. There are millions out there right now with no severance package right now. That just rubs me the wrong way. They should take what they can get because they are damned lucky that Sony didn't just tell them "Were closing the factory, sorry you don't have a job anymore."

Are you somehow missing the fact that they 'taking what they can get' is exactly what they intend to do? Obviously what they can get is largely defined by what they can successfully demand. The French are aware of that, hence the existence of a living, breathing labour movement in that country, unlike the U.S.

I rarely buy CD's or DVD's anymore. DVD's because of Blu-ray and CD's when they started the DRM/Not-a-CD-but-yet-it-is-a-CD era.

Pretty much when Bestbuy/Walmart non-dedicated media stores took the market over. In NYC you used to have HMV, Tower, And Virgin as large dealers which offered wide selections. None of them will exist anymore.

As far as downloads go. The quality is getting there. But the next generation IMO honestly has no clue about sound quality or even visual quality. They're happy with YouTube. While i'd rather rip my eyes out.

I haven't bought a physical CD in at least two years, maybe 3. I typically download stuff now, usually off Amazon. 256k compression FTW, sounds great. I'm not averse to physical media, but most places the selection isn't that hot and the price is higher.

I've been buying CDs since a few months after they became available in the US (yes, I'm older than most of you), and I will continue to buy them until they are either no longer available or replaced by another physical format I consider to be "better." I've never bought a single track from a digital download service, though now that some download stores are selling DRM-free files I might consider buying a track or two here or there, for novelty stuff I don't really care whether I lose in a hard drive crash or something.

The album concept, which made sense in the past when music was always on physical media, is surely now defunct, and should be dropped. You now have the rather absurd situation with long established artists, where their most popular songs are available in multiple versions (more than 5 in some cases), often identical, taken from various compilation albums. In many cases there are three or four compilation albums, originally released over periods of several decades, with almost identical track lists. I can understand why albums would make sense to help locate songs for older established artists, but for current and future acts there will eventually need to be a transition to a non-album future, where bands simply release "songs", and where the concept of album tracks and "singles" will surely dissappear.Also, the date of the material will eventually cease to be particularly relevant. Huge on-line databases of songs, spanning decades, means the concept of the "latest release" will also cease to have much meaning. Perhaps even the importance of the artist will wane over time. People will simply buy songs, and the artist and date of release will only be of marginal interest. If this ushers in a world where songs have to stand more on their own merits, rather than being bought inadvertantly as part of an album, or because the purchaser likes the looks of the artist, this will be overall a very good thing for music as a whole, and should help improve the quality of music generally. If we can move right away from the album and the numerous low quality filler tracks, that can only be a good thing.

So disinterested (disgusted?) in the contemporary music scene here in the U.S., I stream radio from overseas.

I haven't purchased CDs in several years. Albums are weaker and replay interest for the CDs I bought in the late 90s and early 2000s just isn't there.

I like iTunes but, unfortunately, it's difficult to get music from artists who do not have US label deals or whose catalog is only partly available because they were dropped or just added by a US distributor. I can't buy selections from an international iTunes store. I can't even watch music videos from some int'l artists who use YouTube as their official source because I get the "not available in your country" error. All these artificial walls are quite simply aggravating to the consumer.

According to CDpedia I bought one new CD for myself last May and only two in 2007. Other than that I bought two as Christmas gifts. Since I'm not much of a music person I typically only buy CDs of a handful of artists I care about. I did get a $50 ITMS gift card for Christmas so I have been picking up singles from artists who I'd normally never buy a CD of.

I've actually been buying more CDs recently. First of all, it helps that there's a local chain dedicated just to selling music (and maybe some used movies on the side, but really it's all about the music). Secondly, it's services like Pandora that got me interested in CDs again. I've been getting exposed to a ton of music that will never see airtime on the local stations. I still love the album as a vehicle, especially the concept album. I'm not old enough to have any fond memories of vinyl, either.

A fucking YEAR of severance??? AND relocation? WTF are they bitching about. There are millions out there right now with no severance package right now. That just rubs me the wrong way. They should take what they can get because they are damned lucky that Sony didn't just tell them "Were closing the factory, sorry you don't have a job anymore."

quote:

Compared to Europe, most US workers are treated by their employers little better than Asian factory slaves. And we think we've got it good because we hop from employer to employer chasing a better paycheck.

Yes, I'm always amazed what the USA tolerates in the name of "free enterprise". Millions in bonuses for running AIG into the ground, but sorry you auto workers, you'll have to take a serious cut in pay - the half of you that are left - because our bonusified executives couldn't manage to design a car half as good as the Japanese. Even in Canada, a layoff without cause - ie. you're not fired for stealing ,insubordination etc. - usually means a week to a month of pay for each year of service to a max of 2 years. (Unless the company is bankrupt, in which case you get shafted like all the other creditors). A Sony plant in the middle of nowhere closing out would probably have to pay an average of a year's severance. An IT worker with 25 years service should expect, as a professional, 2 years' severance - assuming you can get employment for 25 years any more. (Amount mitigated if you find comparable work...)

As for CD's - I'll repeat what I always say. They don't make 60s-70s-80s music any more. Where's that spark of genius gone? Between the 500+ CD's I bought over 24 years (the "Born in the USA" from 1985 still plays) and thanks to Napster and Morpheus, I have almost everything I need. My wife has bought 2 Il Divo CD's in the last 2 years, that's about it. We have 30GB of music (or, noise). I won't buy music because 2 of my 4 MP3 players are MP3 only; why should I jump through hoops to recode something I bought.

Yes, if the music industry had sold and priced their digital product for buyers like me, they might have made several thousand off me too. After all, the satellite TV company makes $60/month off me for what is essentially free broadcast TV, because they deliver a convenient and quality product.

Now it's too late. I have what I need and they don't make much more of it - that I want, anyway. To my 50-year-old ears, 128 bits sounds just fine, even burned to CD and played through a 10-speaker Harmon Kardon system while driving. It would be nice to have all the tags and artwork , and to not have to spend time repairing someone's tagging lack of knowledge. but it's not worth $1/song or even 50 cents for some cute but obscure old song.

So they missed the boat on a easy revenue stream. Too late now. Time to figure out what to do going forward.

My hope is the new process, whatever it is - independent producers, a cooperative group that centralizes standard contracts with itunes and the others, etc. - will result in more money for the artists and less for the middleman. Without the need for record stores, distribution channels and warehouses, the overhead that justified the publishers' and labels' 50-50 split is fast disappearing. Hollywood agents allegedly got 10% or 15% - that sounds plenty good for record companies.

A fucking YEAR of severance??? AND relocation? WTF are they bitching about. There are millions out there right now with no severance package right now. That just rubs me the wrong way. They should take what they can get because they are damned lucky that Sony didn't just tell them "Were closing the factory, sorry you don't have a job anymore."

quote:

Compared to Europe, most US workers are treated by their employers little better than Asian factory slaves. And we think we've got it good because we hop from employer to employer chasing a better paycheck.

Yes, I'm always amazed what the USA tolerates in the name of "free enterprise". Millions in bonuses for running AIG into the ground, but sorry you auto workers, you'll have to take a serious cut in pay - the half of you that are left - because our bonusified executives couldn't manage to design a car half as good as the Japanese. Even in Canada, a layoff without cause - ie. you're not fired for stealing ,insubordination etc. - usually means a week to a month of pay for each year of service to a max of 2 years. (Unless the company is bankrupt, in which case you get shafted like all the other creditors). A Sony plant in the middle of nowhere closing out would probably have to pay an average of a year's severance. An IT worker with 25 years service should expect, as a professional, 2 years' severance - assuming you can get employment for 25 years any more. (Amount mitigated if you find comparable work...)

As for CD's - I'll repeat what I always say. They don't make 60s-70s-80s music any more. Where's that spark of genius gone? Between the 500+ CD's I bought over 24 years (the "Born in the USA" from 1985 still plays) and thanks to Napster and Morpheus, I have almost everything I need. My wife has bought 2 Il Divo CD's in the last 2 years, that's about it. We have 30GB of music (or, noise). I won't buy music because 2 of my 4 MP3 players are MP3 only; why should I jump through hoops to recode something I bought.

Yes, if the music industry had sold and priced their digital product for buyers like me, they might have made several thousand off me too. After all, the satellite TV company makes $60/month off me for what is essentially free broadcast TV, because they deliver a convenient and quality product.

Now it's too late. I have what I need and they don't make much more of it - that I want, anyway. To my 50-year-old ears, 128 bits sounds just fine, even burned to CD and played through a 10-speaker Harmon Kardon system while driving. It would be nice to have all the tags and artwork , and to not have to spend time repairing someone's tagging lack of knowledge. but it's not worth $1/song or even 50 cents for some cute but obscure old song.

So they missed the boat on a easy revenue stream. Too late now. Time to figure out what to do going forward.

My hope is the new process, whatever it is - independent producers, a cooperative group that centralizes standard contracts with itunes and the others, etc. - will result in more money for the artists and less for the middleman. Without the need for record stores, distribution channels and warehouses, the overhead that justified the publishers' and labels' 50-50 split is fast disappearing. Hollywood agents allegedly got 10% or 15% - that sounds plenty good for record companies.

I don't think the album format is obsolete. I like being able to see a bit more than 1-2-3 hot singles, that get played so much that it gets tiring anyway. Agreed, most artists don't have what it takes to make one album-full of good songs, but those that do or almost do are the ones worth listening to (as opposed to just hearing distractedly). Plus, some albums are well-constructed, and actually tell a story.

I have not bought much music in the last several years. I have, however, borrowed truckloads from my local library and nearby library systems so that I have quite a variety to listen to on a regular basis. I used to listen to radio more, but with 99% of the stations owned by a few large monopolies, there is no variety any more...only lots of the same thing on multiple stations on the dial. Furthermore, I expect what little is there to dry up further as the music industry tries to extract payments from am/fm stations for air-play time. I used to try out listening to a lot of different things before the music died (i.e., when the music moguls got off their blow long enough to kill the original napster). Now I don't bother any more.

I think you will find that the music industry considers that if you don't actually still own the original "hard copy" of your music, that it is "stolen"....especially if you have already ripped it and given/sold the original LP, CD, or whatever (yeah, probably cassette or 8-track tape, too). I would guess that they consider "saved" streamed music to be "stolen" too, since you haven't "purchased" the hard-copy license for same. I don't suppose it matters to them that you may have purchased the same blinking music multiple times in the past...now you're a thief.